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In 1970 Suneeta Reddy was appointed CEO of Apollo Hospitals Enterprise Limited (NSE:APOLLOHOSP). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Apollo Hospitals Enterprise
How Does Suneeta Reddy's Compensation Compare With Similar Sized Companies?
According to our data, Apollo Hospitals Enterprise Limited has a market capitalization of ₹172b, and pays its CEO total annual compensation worth ₹38m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹29m. We looked at a group of companies with market capitalizations from ₹139b to ₹446b, and the median CEO total compensation was ₹44m.
That means Suneeta Reddy receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Apollo Hospitals Enterprise has changed from year to year.
Is Apollo Hospitals Enterprise Limited Growing?
Over the last three years Apollo Hospitals Enterprise Limited has shrunk its earnings per share by an average of 5.2% per year (measured with a line of best fit). It achieved revenue growth of 17% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Apollo Hospitals Enterprise Limited Been A Good Investment?
Since shareholders would have lost about 8.4% over three years, some Apollo Hospitals Enterprise Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Suneeta Reddy is paid around what is normal the leaders of comparable size companies.